As FCAC released new guidelines to protect mortgage owners, brokers say defaults still possible

A financial consumer advocacy organization has released new guidelines meant to protect mortgage owners, but real estate experts say higher interest rates could still bring about mortgage defaults.

Leah Zlatkin, a mortgage broker and expert with LowestRates.ca, said in an interview with BNNBloomberg.ca Monday that despite outsized increases to interest rates, Canadians have largely been making their mortgage payments. However, she said that low mortgage delinquency rates are occurring among A-lenders, and it is less clear what is taking place among B-lenders and private lenders

Canada’s A-lenders include major banks and credit unions that cater to customers with strong credit scores, according to LowestRates.ca, while B-lenders are institutions with a lower barrier to entry often with higher interest rates.

“We have to realize that this is only the tip of the iceberg, you can't see the bottom of the iceberg below, we don't know what is happening with B-borrowers and private borrowers,” Zlatkin said.